"Plan for Growth" sets regulation agenda

Coinciding with the 2011 Budget, the government published its "Plan for Growth" on 23rd March. The Plan sets out a range of policies aimed at helping business to lead the United Kingdom out of recession and to help re-balance the economy towards manufacturing and exports.

The Plan includes a variety of policy initiatives, and promises to reduce the burden of regulation – and employment regulation in particular – on small businesses.  

The four aims of the Plan for Growth are:

1. To create the most competitive tax system in the G20
2. To make the UK one of the best places in Europe to start, finance and grow a business
3. To encourage investment and exports as a route to a more balanced economy
4. To create a more educated workforce that is the most flexible in Europe.

The Plan also promises:

• A lower domestic regulatory burden, and
• The lowest burdens from employment regulation of any EU country.

Specific announcements in the Plan for Growth include:

• A 3-year moratorium exempting micro-businesses employing fewer than 10 workers and start-up businesses from new domestic regulation
• The right to request time off for training will not now be extended to businesses with fewer than 250 employees
• Provisions banning "Dual Discrimination" contained in the Equality Act 2010 have been postponed indefinitely
• Not extending the right to request flexible working to parents of 17 year old children as previously announced
• Provisions in the Equality Act 2010 making employers liable for harassment of their staff by customers dubbed "Unworkable" and are to be reconsidered
• Making further changes to employment legislation to reduce the costs to business of compliance

How realistic are the plans to reduce regulation?

The announcement shows that the coalition government is starting to hear the message from small business owners about the burden of ever-increasing regulation, particularly in the current harsh economic climate.

But the moratorium on new domestic regulation for micro-businesses does not exempt them from all the regulations that are already in force – and those added since the coalition government came to power include the Equality Act; the abolition of the retirement age and Additional Paternity Leave.

It also does not include any new regulation that is imposed by the European Union – which includes the Agency Workers' Regulations, due in force this October.

There is no doubt a strong desire within the coalition government to free-up businesses from what they see as excessive employment regulation. But in spite of this announcement, there are still more new regulations in the pipeline, including a promise to give employees new rights to "flexible parental leave".

Also, among plans to streamline employment tribunals is a proposal to levy "fines" on employers who unsuccessfully fight tribunal claims – in addition to having to pay compensation.